Mar 31, 2018
Note 1
Corporate Information
T T Limited ("Company") is a public Company domiciled in India and is incorporated under the provisions of the Companies Act applicable In India. Its shares are listed with the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The registered office of the Company is located at 879, Master Prithvi Nath Marg, Karol Bagh, Delhi-110005. The Company is engaged in primarily one segments consisting of Textile (comprising of yarn manufacturing. Knitting, and cutting and sewing of textiles products).
The financial statements are authorised for issue in accordance with a resolution of the Board of Directors dated 18th May 2018
Note 2.
First-time adoption optional exemption Overall principle
The Company has prepared the opening balance sheet as per Ind AS as of 1 April, 2016 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions regarding retrospective application, availed by the Company as detailed below.
In respect of subsidies receivable under the Technology Up-gradation Fund Scheme (TUFS) for Textiles established by Government of India, the lending institutions are yet to provide confirmation as to action taken by them towards claiming reimbursement of subsidies. Accordingly, subsidy receivable is subject to final adjustments that may arise on settlement of issues and actions taken by the lenders.
b) Term/right attached to equity shares
Company has only one class of equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share.
As per records of the company, including its register of shareholders/members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares
d) The company has not allotted any fully paid up shares pursuant to contract(s) without payment being received in cash nor has allotted any fully paid up shares by way of bonus shares nor has bought back.
ii) Rupees Term Loan from Oriental Bank of Commerce (OBC), Punjab National Bank (PNB), State Bank of India (SBI) and Indian Bank are secured by pari-passu charge on company''s immoveable & moveable assets located at Gajroula, Avinashi, Rajula units and Wind Mill located at Jamanvada, Gujarat of the company. Loans are further secured by personal guarantee of Shri Rikhab C. Jain, Chairman of the Company. Term Loan carry ROI ranging from 11.10% to 12.60% p.a. The aforesaid interest rate is subject to benfLt under TUF scheme of Government of India and state interest subsidies where ever applicable.
iii) The Company has neither accepted nor renewed any Fixed Deposit from public during the year. Entire outstanding Fixed Deposit as on 31st March, 2016 was repaid during 2016-17.
iv) Borrowings from Directors and others is the amount inducted by the promoters as per the terms and conditions stipulated in sanctions of the loans by the bankers, are not repayabale in next 12 months therefore all such borrowings have been classified as "Long term in nature"
v) The working capital loans from consortium of banks i.e. OBC & PNB are secured by hypothecation of Raw Material, Work in process, Packing Material, Finshed Goods and Book Debts and second charge over Fixed Assets located at Gajroula, Avinashi, and Rajula and further secured by personal guarantee of Shri Rikhab C. Jain, Chairman of the Company.
The information as required to be disclosed under The Micro, Small and Medium Enterprises Development Act, 2006 ("the Act") has been determined to the extent such parties have been identified by the company, on the basis of information and records available with them. This information has been relied upon by the auditors. Disclosure as required under section 22 of the Act, is as under. Disclosure in respect of interest due on delayed payment has been determined only in respect of payments made after the receipt of information, with regards to filing of memorandum, from the respective suppliers.
3. Earnings per share
Basic earnings per equity share has been computed by dividing net profit after tax by the weighted average number of equity shares outstanding for the year
4. Operating lease
The Company has entered into operating lease arrangements for office space. The average lease term is 1 years. The minimum lease payment during non-cancellable period under the going arrangements in the aggregate for each of the following period as follows:
Based on legal advice, discussions with the solicitors, etc., the management believes that there is fair chance of decisions in the company''s favour in respect of all the items listed at (i) to (vi) above and hence no provision is considered necessary against the same. The management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the company''s financial position and results of operations.
a) Income Tax Assessment have been completed up to assessment year 2014-15 except for the Assessment year 2013-14 where the department has raised demand of Rs 811426/-. The management forsees that existing provision are sufficient for the same.
b) Erstwhile T.T. Finance Ltd. (Since amalgamated with the Company) has paid Income tax demand of Rs. 8,05,000, pertaining to the assessment year 1992-1993. The company has contested the same and ITAT has quashed the demand. In appeal effect, the company has found an apparent mistake of not allowing credit of tax paid and hence filed a rectification application under section 154, which is pending.
c) In accordance with the company''s policy a sum of Rs. 1230.91 lacs (Previous year Rs. 1083.23 lacs) has been shown as MAT credit entitlement under "Long term loan & advances".
5. Employee Benefits
A Defined Contribution plans
The Company has recognised Rs. 171.25 lakhs (Previous year 196.33 lakhs) in statement of profit and loss as Company''s contribution to provident fund, NIL (Previous year :NIL) as Company''s contribution to Superannuation Fund.
Sensitivities due to mortality and withdrawals are not material & hence Impact of change not calculated. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.
xi The estimates of future salary increase considered in actuarial valuation, take account of inflation, seniority, promotion and other evant factors. The above information is certified by the actuary and relied upon by the auditors.
xii The employer''s best estimate of contribution expected to be paid during the next year is Rs. 128.81 lakhs
6: Financial Instruments
Capital Management
The Company manages its capital to ensure that the entities in the Company will be able to continue as going concern while maximizing the return to shareholders and also complying with the ratios stipulated in the loan agreements through the optimization of the debt and equity balance.
The capital structure of the Company consists of net debt (borrowings as detailed in note 14 and 16 offset by cash and bank balances as detailed in note 8 & 10) and total equity of the Company.
The Company is not subject to any externally imposed capital requirements.
Note:
i. Debt is defined as long and short-term borrowings (excluding derivative, financial guarantee contracts), as described in notes 14 and 19.
ii. In order to achieve this overall objective, the Group''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to call loans and borrowings or charge some penal interest. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the current years and previous years.
7. Financial risk management
The Company''s activities expose it to a variety of financial risks which includes market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk.
The Company''s focus is to ensure liquidity which is sufficient to meet the Company''s operational requirements. The Company monitors and manages key financial risks so as to minimise potential adverse effects on its financial performance. The Company has a risk management policy which covers the risks associated with the financial assets and liabilities. The details for managing each of these risks are summarised ahead.
8. Market risk
Market risk is the risk that the expected cash flows or fair value of a financial instrument could change owing to changes in market prices. The Company''s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest rates.
9. Foreign currency risk management
Foreign exchange risk is the risk that the fair value of future cash flows of financial instruments will fluctuate because of changes in foreign exchange rate. The Company derives significant portion of its revenue in foreign currency, exposing it to fluctuations in currency movements. The Company has laid down a foreign exchange risk policy as per which senior management team reviews and manages the foreign exchange risks in a systematic manner, including regular monitoring of exposures, proper advice from market experts, hedging of exposures, etc. The Company uses derivative financial instruments, such as foreign exchange forward contracts, to mitigate foreign exchange related risk exposures. Derivative financial instruments relating to a firm commitment or a highly probable forecast transaction, are marked to market at every reporting date. In management''s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.
10. Interest rate risk management
The company is exposed to interest rate risk because it borrows funds at both fixed and floating interest rates. The risk is managed by the company by maintaining an appropriate mix between fixed and floating rate borrowings. The company''s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.
Interest rate sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 50 basis point increase or decrease represents management''s assessment of the reasonably possible change in interest rates.
If interest rates had been 50 basis points higher/lower and all other variables were held constant, the company''s:
I) profit for the year ended 31 March, 2018 would decrease/increase by Rs. 69.70 lacs (Previous year: decrease/increase by Rs. 78.65 lacs). This is mainly attributable to the company''s exposure to interest rates on its variable rate borrowings.
11. Other price risks
The company is not exposed to any instrument which has price risks arising from equity investments which is not material.
12. Credit risk management
Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Company. The Company''s exposure to credit risk primarly arises from trade receivables, balances with banks, investments and security deposits. The credit risk on bank balances is limited because the counter parties are banks with good credit ratings.
13. Trade Receivables
Credit risk is managed through credit approvals, establishing credit limits, continuous monitoring of creditworthiness of customers to which the company grants credit terms in the normal course of business. The Company also assesses the financial reliability of customers taking into account the financial condition, current economic trends and historical bad debts and ageing of accounts receivables
14. Investments
The Company limits its exposure to credit risk by generally investing with counter parties that have a good credit rating. The Company has funded defined-benefit gratuity plans. The funded status of these plans are influenced by movements in financial market. A negative performance of the financial markets could have a material impact on cash funding requirements
15. Cash & cash equivalents
With respect to credit risk arising from financial assets which comprise of cash and cash equivalents, the Company s risk exposure arises from the default of the counter party, with a maximum exposure equal to the carrying amount of these financial assets at the reporting date. Since the counter party involved is a bank. Company considers the risks of non-performance by the counter party as non-material.
During the year the Company has recognised loss allowance of Rs. 91.00 lacs Under 12 months expected credit loss model.
No significant changes in estimation techniques or assumptions were made during the reporting period.
16. Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. The Company''s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
Maturity profile of financial liabilities
The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.
17. Commodity Risk
The Company is impacted by the Price volatility of Cotton. Due to significant volatility of the Price of cotton in Domestic and international market, the management has developed and enacted a risk management strategy regarding commodity Price risk and its mitigation.
18. Fair value measurements
This note provides information about how the company determines fair values of various financial assets and financial liabilities.
Fair value of financial assets and financial liabilities that are not measured at fair value (but fair value disclosures are required)
The directors consider that the carrying amounts of financial assets and financial liabilities recognised in the financial statements approximate their fair values.
19. Derivative financial Instruments
The Company holds derivative financial instruments such as foreign currency forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The objective of hedges is to minimize the volatility of INR cash flows of highly probable forecast transaction. The Company''s risk management policy is to hedge around 70% to 90% of net exposure with forward exchange contract, having a maturity upto 12 months. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.
20. Other Disclusorers
20.1 Sales Tax assessment in different states have been completed up to the assessment year 2013-14. Liability if any, arising out of remaining Sales Tax Assessments, which are in progress at various stages, will be provided only on the final assessment. However, management foresees no significant liability on this account.
20.2 Consistent with its past policy, the company has on the basis of technical opinion continued to treat plant & machinery of spinning units at Gajroula, Avinashi & Rajula as continuous process plant.
20.3 Trade creditors include outstanding dues of small scale industries Rs. 12.28 lacs (Previous year Rs. 11.21 lacs). The above information regarding small scale industrial undertakings has been determined to the extent such parties have been identified by the company and on the basis of information available with them.
20.4. Derivative instruments and unhedged foreign currency exposure As on date of Balance Sheet the company has gross exposure in the form of Plain Vanilla Forward Contracts for the purpose of hedging export sales amounting to Rs .44 cr. (P Y Rs. 5.83 cr.).
20.5. a) The response to letters sent by the Company requesting confirmation of balances has been insignificant. In the management''s opinion, adjustments on reconciliation of the balances, if any required, will not be material in relation to the financial statements of the company and the same will be adjusted in the financial statements as and when the confirmations are received and reconciliations completed.
b) Inventories, loans & advances, trade receivables and other current/non-current assets are reviewed annually and in the opinion of the Management do not have a value on realization in the ordinary course of business, less than the amount at which they are stated in the Balance Sheet.
a) Figures in brackets, wherever given, are in respect of previous year.
b) The company has reclassified previous year figures to confirm to this year''s classification.
Notes to the reconciliaiton
1 Under previous GAAP, acturial gains and losses were recognised in profit or loss. Under Ind AS, the actuarial gains and losses form part of remeasurement of the net defined benefit liability/asset which is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income under Ind AS instead of profit or loss. The actuarial gains for the year ended March 31,2017 were Rs. 18.50 lakhs and the tax effect thereon Rs. 6.40 lakhs This change does not affect total equity, but there is decrease in profit before tax of Rs. 18.50 lakhs and in total profit of Rs. 12.10 lakhs for the year ended March 31,2017.
2 Previous GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deffered taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences, which was not required under previous GAAP.
3 Under Ind AS, effective portion of the cash flow hedge to be recognised in other comprehensive income and however in the previous GAAP same has been recognised under Reserve and Surplus under the head" Cash Flow Hedge Reserve".
4 Under Previous GAAP, there was no concept of other comprehensive income. Under Ind AS, specified items of income, expenses, gains, or losses ae required to be presented in other comprehensive income.
21. Recent Accounting Pronouncements
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration: On March 28,2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. The amendment will come into force from April 1,2018. The Company is evaluating the effect of this on the financial statements.
Ind AS 115- Revenue from Contract with Customers: On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.
The standard permits two possible methods of transition:
- Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8-Accounting Policies, Changes in Accounting Estimates and Errors
- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch -up approach)
The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1,2018.
The Company will adopt the standard on April 1,2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31,2018 will not be retrospectively adjusted. The company is evaluating the effect on adoption of Ind AS 115.
Note: 22.
Approval of financial statements
The financial statements for the year ended 31 March, 2018 were approved by the Board of Directors and authorise for issue on 18th May, 2018.
Mar 31, 2014
1. Contingent liabilities not provided for in respect of:
Amount in Rs.
Particulars For Year Ended For Year Ended
31.03.2014 31.03.2013
a) Guarantees given by Bank 30,408,000 24,131,000
b) Income tax matters in dispute 1,990,758 1,990,758
c) Other Matters - 5,220,874
Based on legal advice, discussions with the solicitors, etc., the
management believes that there is fair chance of decisions in the
company''s favour in respect of all the items listed above and hence no
provision is considered necessary against the same. The management
believes that the ultimate outcome of these proceedings will not have a
material adverse effect on the company''s financial position and results
of operations.
2. Obligations and commitments outstanding:
a) Estimated value of contracts remaining to be executed NIL
233,700,000 on capital account and not provided for (net of advances)
b) Bills discounted with banks 950,943,044 560,110,996
3. a) Income Tax Assessments have been completed up to assessment
year 2011-12 except for the Assessment year 2003-04 where the
department has raised demand of Rs.15,85,758 and for Assessment Year
2010-11 where the department has intaited penalty proceeding. The
management forsees that existing provision are sufficient for the same.
b) Erstwhile T.T. Finance Ltd. (Since amalgamated with the Company) has
paid Income tax demand of Rs. 8,05,000, pertaining to the assessment
year 1992-1993. The company has contested the same and ITAT has quashed
the demand. In appeal effect, the company has found an apparent mistake
of not allowing credit of tax paid and hence filed a rectification
application under section 154, which is pending.
c) In accordance with the company''s policy a sum of Rs.100,643,439
(Previous year Rs. 76,315,803) has been shown as MAT credit entitlement
under "Long term loan & advances".
4. Sales Tax assessments in different states have been completed up
to the assessment year 2010-11. Liability if any, arising out of
remaining Sales Tax Assessments, which are in progress at various
stages, will be provided only on the final assessment. However,
management foresees no significant liability on this account
5. Consistent with its past policy, the company has on the basis of
technical opinion continued to treat plant and machinery of spinning
units at Gajroula, Avinashi & Rajula as continuous process plant.
6. Trade creditors include outstanding dues of small scale industries
19,58,714 (Previous year Rs. 24,25,132).The above information regarding
small scale industrial undertakings has been determined to the extent
such parties have been identified by the company, on the basis of
information available with them.
7 Derivative instruments and unhedged foreign currency exposure
As on date of Balance Sheet the company has gross exposure in the form
of Plain Vanilla Forward Contracts for the purpose of hedging export
sales amounting to Rs 38.93 Cr (P Y Rs. 32.65 crore).
8. a) The response to letters sent by the Company requesting
confirmation of balances has been insignificant. In the management''s
opinion, adjustments on reconciliation of the balances, if any
required, will not be material in relation to the financial statements
of the Company and the same will be adjusted in the financial
statements as and when the confirmations are received and
reconciliations completed.
b) Inventories, loans & advances, trade receivables and other current /
non-current assets are reviewed annually and in the opinion of the
Management do not have a value on realization in the ordinary course of
business, less than the amount at which they are stated in the Balance
Sheet.
9. Employee benefit obligations
Defined benefit plan
The employee''s Gratuity Fund Scheme, which is defined benefit plan, is
managed by Trust maintained with Life Insurance Corporation of India
(LIC). The present value of obligation is determined, using Projected
Unit Credit Method, which recognized each period of service as giving
rise to additional unit of employee benefit entitlement and measures
each unit separately to build up the final obligation. The obligation
for compensation absences is recognized in same manner as gratuity.
10. Related party disclosures
The information regarding related parties has been determined on the
basis of criteria specified in AS-18 "Related Party Disclosures" and to
the extent such parties have been identified by the company, on the
basis of information available with them. This has been relied upon by
the auditors.
Names of related parties and description of relationship:
1. Holding Company Nil
2. Subsidiaries Company Nil
3. Fellow Subsidiaries Nil
4. Associates Nil
5. Key Management Personnel Dr. Rikhab C. Jain, Mr. Sanjay Jain, Mrs.
Jyoti Jain
6. Relatives of Key Management Personnel Mrs. Kala Devi Jain
11. Segment information
The Company operate under single business segment "Textiles". Company
deals in four product i.e. cotton, yarn, fabric and made- ups. There is
not other reportable segment.
Company sells cotton in domestic as well as in overseas market. Yarn,
covers bought out yarn as well as production of basic cotton yarn over
a very wide range of counts, which besides being primarily exported, is
also marketed in Domestic Market. Fabric includes both bought out
fabric as well as the value added activities relating to knitting,
dyeing and processing. Textile Made-ups, made under licence of renowned
brand "T.T".
12. a) Figures in brackets, wherever given, are in respect of previous
Year.
b) The company has reclassified previous year figures t conform to this
year''s classification
Mar 31, 2013
1 Basis of Preparation
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The financial statements have been prepared to comply in
all material respects with the accounting standards notified under the
Companies (Accounting Standards) Rules, 2006, (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention.
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year.
2. Contingent liabilities not provided for in respect of:
a) Guarantees given by Bank 24,131,000 10,900.000
b) Income tax matters in dispute 1,990,758 15,85,758
c) Other Matters 5,220,874 -
Based on legal advice, discussions with the solicitors, etc., the
management believes that there is fair chance of decisions in the
company''s favour in respect of all the items listed above and hence no
provision is considered necessary against the same. The management
believes that the ultimate outcome of these proceedings will not have a
material adverse effect on the company''s financial position and results
of operations.
3. a) Income Tax Assessments have been completed up to assessment
year 2010-11 except for the Assessment year 2003-04 where the
department has raised demand of Rs.15,85,758 and for Assessment Year
2010-11 where the department has disallowed expenditure of Rs.41,34,844
(with NIL Demand), which has been claimed in next assessment year.
Assessment for the year 2011-12 is in progress, liability if any over
and above the existing provisions will be provided only on completion
of the assessments .The management forsees that existing provisions are
sufficient for the same.
b) Erstwhile T.T. Finance Ltd. (Since amalgamated with the Company) has
paid Income tax demand of Rs. 8,05,000, pertaining to the assessment
year 1992-1993. The company has contested the same and ITAT has quashed
the demand. In appeal effect, the company has found an apparent mistake
of not allowing credit of tax paid and hence filed a rectification
application under section 154, which is pending.
c) In accordance with the company''s policy a sum of Rs.7,63,49,524
(Previous year Rs. 5,88,13,983) has been shown as MAT credit
entitlement under "Long term loan & advances".
4. Sales Tax assessments in different states have been completed up
to the assessment year 2009-10. Liability if any, arising out of
remaining Sales Tax Assessments, which are in progress at various
stages, will be provided only on the final assessment. However,
management foresees no significant liability on this account
5. Consistent with its past policy, the company has on the basis of
technical opinion continued to treat plant and machinery of spinning
units at Gajroula, Avinashi & Rajula as continuous process plant.
6. Trade creditors include outstanding dues of small scale industries
24,25,132 (Previous year Rs. 20,25,120).The above information regarding
small scale industrial undertakings has been determined to the extent
such parties have been identified by the company, on the basis of
information available with them.
7 Derivative instruments and unhedged foreign currency exposure
As on date of Balance Sheet the company has gross exposure in the form
of Plain Vanilla Forward Contracts for the purpose of hedging export
sales amounting to Rs 32.65 Cr (Previous Year NIL).
8. a) The response to letters sent by the Company requesting
confirmation of balances has been insignificant. In the management''s
opinion, adjustments on reconciliation of the balances, if any
required, will not be material in relation to the financial statements
of the Company and the same will be adjusted in the financial
statements as and when the confirmations are received and
reconciliations completed.
b) Inventories, loans & advances, trade receivables and other current /
non-current assets are reviewed annually and in the opinion of the
Management do not have a value on realization in the ordinary course of
business, less than the amount at which they are stated in the Balance
Sheet.
9. Employee benefit obligations
Defined benefit plan
The employee''s Gratuity Fund Scheme, which is defined benefit plan, is
managed by Trust maintained with Life Insurance Corporation of India
(LIC). The present value of obligation is determined, using Projected
Unit Credit Method, which recognized each period of service as giving
rise to additional unit of employee benefit entitlement and measures
each unit separately to build up the final obligation. The obligation
for compensation absences is recognized in same manner as gratuity.
a) Reconciliation of opening and closing balances of the present value
of the defined benefit obligation
The expected rate in increase in salary considered in actuarial
valuation is based on consideration of inflation, seniority, promotion,
accretion, and other relevant factors including supply and demand in
the employment market.
10. Related party disclosures
The information regarding related parties has been determined on the
basis of criteria specified in AS-18 "Related Party Disclosures" and to
the extent such parties have been identified by the company, on the
basis of information available with them. This has been relied upon by
the auditors.
Names of related parties and description of relationship:
1. Holding Company Nil
2. Subsidiaries Company Nil
3. Fellow Subsidiaries Nil
4. Associates Nil
5. Key Management Personnel Dr. Rikhab C. Jain, Mr. Sanjay Jain,
Mrs.Jyoti Jain
6. Relatives of Key Management Personnel Mrs. kala Devi Jain
*During the previous year remuneration has been restricted to Rs 4Lacs
per months as in compliance to Section 198,309 and schedule XIII of the
Companies Act, 1956 in view of current year Losses. The same has been
considered as amount held in trust by concerned director as per section
provision of section 309 of the Companies Act , 1956.
11. Segment information
The Company operate under single business segment "Textiles". Company
deals in four product i.e. cotton, yarn, fabric and made- ups. There is
not other reportable segment.
Company sells cotton in domestic as well as in overseas market. Yarn,
covers bought out yarn as well as production of basic cotton yarn over
a very wide range of counts, which besides being primarily exported, is
also marketed in Domestic Market. Fabric includes both bought out
fabric as well as the value added activities relating to knitting,
dyeing and processing. Textile Made-ups, made under licence of renowned
brand "T.T".
12. a) Figures in brackets, wherever given, are in respect of previous
Year.
b) The company has reclassified previous year figures t conform to this
year''s classification
Mar 31, 2012
1 Basis of Preparation
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The financial statements have been prepared to comply in
all material respects with the accounting standards notified under the
Companies (Accounting Standards) Rules, 2006, (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention.
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year, except for the
change in accounting policy explained below.
a) Terms/rights attached to Equity Shares
Company has only one class of equity shares having a par value of
Rs.10/-. Each holder of equity shares is entitled to one vote per
share. The Company declares and pays dividends in Indian rupees. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the ensuing Annual General Meeting.
As per records of the company, including its register of
shareholders/members and other declarations received from shareholders
regarding beneficial interest, the above shareholding represents both
legal and beneficial ownerships of shares
d) The Company has not allotted any fully paid up shares pursuant to
contract(s) without payment being received in cash nor has allotted any
fully paid up shares by way of bonus shares nor has bought back any
class of shares during the period of five years immediately preceding
the balance sheet date.
ii) Rupees Term Loan from Oriental Bank of Commerce (OBC), Punjab
National Bank(PNB), State Bank of Mysore (SBM) and Indian Bank are
secured by parri-passu charge on company's immoveable & moveable assets
located at Gajroula, Avinashi, Rajula units and Wind Mills located at
Govindhapuram & Kundadam Villages, Tirupur District of the company.
Loans are further secured by personal guarantee of Shri Rikhab C. Jain,
Chairman of the company. Term Loan carry ROI ranging from 12.75% to
13.50% p.a. The aforesaid interest rate is subject to benefit under TUF
scheme of Government of India.
iii) Fixed Deposits carry interest @11.5%-13% and repayable within one
to three Years from the date of Deposits.
iv) Borrowings from Directors and others is the amount inducted by the
promoters as per the terms and conditions stipulated in sanctions of
the loans by the bankers, are not repayable in next 12 Months therefore
all such borrowings have been classified as "Long Term in nature"
The information as required to be disclosed under The Micro, Small and
Medium Enterprises Development Act, 2006 ("the Act") has been
determined to the extent such parties have been identified by the
company, on the basis of information and records available with them.
This information has been relied upon by the auditors. Disclosure as
required under section 22 of the Act, is as under. Disclosure in
respect of interest due on delayed payment has been determined only in
respect of payments made after the receipt of information, with regards
to filing of memorandum, from the respective suppliers.
Direct taxes refundable represent amounts recoverable from the Income
Tax Department for various assessment years. In respect of disputed
demands, company has filed appeals which are pending at various levels
and for assessment years where the issues have been decided in favour
of the company, the company is in the process of reconciling /
adjusting the same with the department. Necessary value adjustments
shall be made on final settlement by the department.
In respect of subsidies receivable under the Technology Up-gradation
Fund Scheme (TUFS) for Textiles established by Government of India, the
lending institutions have yet to provide confirmation as to action
taken by them towards claiming reimbursement of subsidies. Accordingly,
subsidy receivable is subject to final adjustments that may arise on
settlement of issues and actions taken by the lenders.
2. Contingent liabilities not provided for in respect of:
Amount in Rs.
As at 31.03.2012 As at 31.03.2011
a) Guarantees given by Bank 1,09,00,000 Nil
b) Income tax matters in dispute 15,85,758 15,85,758
Based on legal advice, discussions with the solicitors, etc., the
management believes that there is fair chance of decisions in the
company's favour in respect of all the items listed above and hence no
provision is considered necessary against the same. The management
believes that the ultimate outcome of these proceedings will not have a
material adverse effect on the company's financial position and results
of operations.
3. Obligations and commitments outstanding:
a) Estimated value of contracts remaining to be executed 7,926,00,000
12,18,49,000 on capital account and not provided for (net of advances)
b) Bills discounted with banks 30,69,65,255 40,94,83,704
4. The company had contracted to sale Plant & Machinery of its plant
location at Avinashi via Memorandum of Understanding (MOU) dated
06.12.2006. However the customer defaulted on the delivery terms and
conditions and hence the company had to dispose balance machinery at a
discount.
As per terms of MOU the company has filed a claim against the customer
for the loss suffered amounting Rs.1,60,69,250 and interest amounting
to Rs.45,60,580 in the year 2008-09. The management is confident that a
sum of Rs. 96,43,327 shown as recoverable (pending settlement), will be
realised in due course.
5. a) Income Tax Assessments have been completed up to assessment
year 2009-10 except for the Assessment year 2003-04 where the
department has raised demand of Rs. 15,85,758 and for Assessment Year
2009-10 where the department has disallowed expenditure of Rs
41,34,844(with NIL Demand), which has been claimed in next assessment
year. Assessment for the year 2010-11 is in progress, liability if any
over and above the existing provisions will be provided only on
completion of the assessments .The management forsees that existing
provisions are sufficient for the same.
b) Erstwhile T.T. Finance Ltd. (Since amalgamated with the Company) has
paid Income tax demand of Rs. 8,05,000, pertaining to the assessment
year 1992-1993. The company has contested the same and ITAT has quashed
the demand. In appeal effect, the company has found an apparent mistake
of not allowing credit of tax paid and hence filed a rectification
application under section 154, which is pending.
c) In accordance with the company's policy a sum of Rs.5,88,13,983
(Previous year Rs. 5,88,13,983) has been shown as MAT credit
entitlement under "Long term loan & advances".
6. Sales Tax assessments in different states have been completed up
to the assessment year 2007-08. Liability if any, arising out of
remaining Sales Tax Assessments, which are in progress at various
stages, will be provided only on the final assessment. However,
management foresees no significant liability on this account
7. Consistent with its past policy, the company has on the basis of
technical opinion continued to treat plant and machinery of spinning
units at Gajroula, Avinashi & Rajula as continuous process plant.
8. Trade creditors include outstanding dues of small scale industries
20,25,120 (Previous year Rs. 35,07,332).The above information regarding
small scale industrial undertakings has been determined to the extent
such parties have been identified by the company, on the basis of
information available with them.
9. Derivative instruments and unhedged foreign currency exposure
As on date of Balance Sheet the company has gross exposure in the form
of Plain Vanilla Forward Contracts for the purpose of hedging export
sales amounting to Rs NIL (Previous Year NIL).
10. a) The response to letters sent by the Company requesting
confirmation of balances has been insignificant. In the management's
opinion, adjustments on reconciliation of the balances, if any
required, will not be material in relation to the financial statements
of the Company and the same will be adjusted in the financial
statements as and when the confirmations are received and
reconciliations completed.
b) Inventories, loans & advances, trade receivables and other current /
non-current assets are reviewed annually and in the opinion of the
Management do not have a value on realization in the ordinary course of
business, less than the amount at which they are stated in the Balance
Sheet.
11. Employee benefit obligations Defined benefit plan
The employee's Gratuity Fund Scheme, which is defined benefit plan, is
managed by Trust maintained with Life Insurance Corporation of India
(LIC). The present value of obligation is determined, using Projected
Unit Credit Method, which recognized each period of service as giving
rise to additional unit of employee benefit entitlement and measures
each unit separately to build up the final obligation. The obligation
for compensation absences is recognized in same manner as gratuity.
a) Reconciliation of opening and closing balances of the present value
of the defined benefit obligation
The expected rate in increase in salary considered in actuarial
valuation is based on consideration of inflation, seniority, promotion,
accretion, and other relevant factors including supply and demand in
the employment market.
12. Related party disclosures
The information regarding related parties has been determined on the
basis of criteria specified in AS-18 "Related Party Disclosures" and to
the extent such parties have been identified by the company, on the
basis of information available with them. This has been relied upon by
the auditors.
*During the current year remuneration has been restricted to Rs 4Lacs
per months as in compliance to Section 198,309 and schedule XIII of the
Companies Act, 1956 in view of current year Losses. The same has been
considered as amount held in trust by concerned director as per section
provision of section 309 of the Companies Act , 1956.
13. Segment information
The Company operate under single business segment "Textiles". Company
deals in four product i.e. cotton, yarn, fabric and made- ups. There is
not other reportable segment.
Company sells cotton in domestic as well as in overseas market. Yarn,
covers bought out yarn as well as production of basic cotton yarn over
a very wide range of counts, which besides being primarily exported, is
also marketed in Domestic Market. Fabric includes both bought out
fabric as well as the value added activities relating to knitting,
dyeing and processing. Textile Made-ups, made under licence of renowned
brand "T.T".
14. a) Figures in brackets, wherever given, are in respect of previous
Year.
b) Till the year ended 31 March 2011, the company was using pre-revised
Schedule VI to the Companies Act 1956, for preparation and presentation
of its financial statements. During the year ended 31 March 2012, the
revised Schedule VI notified under the Companies Act 1956, has become
applicable to the company. The company has reclassified previous year
figures to conform to this year's classification.
Mar 31, 2011
Particulars Current Previous
Year Year
(Rs. in (Rs. in
lakhs) lakhs)
1. Contingent Liabilities not provided for
in respect of
a) Guarantees given by Banks Nil NIL
b) Export Bills discounted with banks
under Irrevocable Letter of Credit 4,094.84 4,476.17
c) Income Tax liability not acknowledged
and contested 15.86 15.86
2. Contract remaining to be executed on capital account is Rs.
1,218.49 lakhs (Previous year Rs. 937.45 lakhs) net of advances Rs.
164.95 Lakhs (Previous year Rs. 151.29 Lakhs).
3. The company had contracted to sale Plant & Machinery of its plant
location at Avinashi via Memorandum of Understanding (MOU) dated
06.12.2006. However the customer defaulted on the delivery terms and
conditions and hence the company had to dispose balance machinery at a
discount.
As per terms of MOU the company has filed a claim against the customer
for the loss suffered amounting Rs.160.69 lakhs and interest amounting
to Rs.45.61 lakhs in the year 2008-09. The management is confident that
a sum of Rs. 94.63 lakhs, shown as recoverable (pending settlement),
will be realised in due course.
4. a) Income Tax Assessments have been completed up to assessment year
2008-09 except for the Assessment year 2003-04 where the department has
raised demand of Rs. 15.86 lakhs and for Assessment Year 2008-09 where
the department has disallowed expenditure of Rs 36.52 Lakhs(with NIL
Demand), which are being contested. Assessment for the year 2009-10 is
in progress, liability if any over and above the existing provisions
will be provided only on completion of the assessments .The management
forsees that existing provisions are sufficient for the same.
b) Erstwhile T.T. Finance Ltd. (Since amalgamated with the Company) has
paid Income tax demand of Rs. 8.05 lakhs, pertaining to the assessment
year 1992-1993. The company has contested the same and ITAT has quashed
the demand. In appeal effect, the company has found an apparent mistake
of not allowing credit of tax paid and hence filed a rectification
application under section 154, which is pending.
c) In accordance with the company's policy a sum of Rs.5,88,13,983
(Previous year Rs. 1,62,45,499) including Rs.4,25,68,484 (Previous year
Rs.13,37,457) for the year has been shown as MAT credit entitlement
under loan & advances.
5. Sales Tax assessments in different states have been completed up to
the assessment year 2007-08. Liability if any, arising out of remaining
Sales Tax Assessments, which are in progress at various stages, will be
provided only on the final assessment. However, management foresees no
significant liability on this account.
6. In the opinion of the Management, the value on realisation of
current assets, loan and advances in the ordinary course of business
would not be less than the amount at which they are stated in the
Balance Sheet and provision for all known liabilities has been made.
7. Consistent with its past policy, the company has on the basis of
technical opinion continued to treat plant and machinery of spinning
units at Gajroula, Avinashi & Rajula as continuous process plant.
8. Trade creditors include outstanding dues of small scale industries
Rs.35.89 lakhs (Previous year Rs. 22.78 lakhs) .The above information
regarding small scale industrial undertakings has been determined to
the extent such parties have been identified by the company, on the
basis of information available with them. This has been relied upon by
the Auditors.
9. Disclosure in accordance with section 22 of Micro, small and Medium
Enterprises Development Act, 2006
10. As on date of Balance Sheet the company has gross exposure in the
form of Plain Vanilla Forward Contracts for the purpose of hedging
export sales amounting to NIL (Previous Year US $ 2.02 million).
11. a) Some of the debit and credit balances appearing under the head
Fixed Deposits, Current Liabilities, Sundry Debtors and Loans &
Advances are subject to confirmation / reconciliation.
b) Previous year figures have been regrouped or rearranged wherever
considered necessary.
12. EMPLOYEE BENEFITS
As per Accounting Standard 15 ÃEmployee Benefità the disclosure of
Employee Benefit, as defined in Accounting Standard are given below:-
Defined Benefit Plan
The employee's Gratuity Fund Scheme, which is defined benefit plan, is
managed by Trust maintained with Life Insurance Corporation of India
(LIC). The present value of obligation is determined, using Projected
Unit Credit Method, which recognized each period of service as giving
rise to additional unit of employee benefit entitlement and measures
each unit separately to build up the final obligation. The obligation
for compensation absences is recognized in same manner as gratuity.
13. SEGMENT INFORMATION
The Company operate under single business segment ÃTextilesÃ. Company
deals in four product i.e. cotton, yarn, fabric and made- ups. There is
not other reportable segment.
Company sells cotton in domestic as well as in overseas market. Yarn,
covers bought out yarn as well as production of basic cotton yarn over
a very wide range of counts, which besides being primarily exported, is
also marketed in Domestic Market. Fabric includes both bought out
fabric as well as the value added activities relating to knitting,
dyeing and processing. Textile Made-ups, made under licence of renowned
brand ÃT.TÃ.
14. RELATED PARTY TRANSACTIONS
The information regarding related parties has been determined on the
basis of criteria specified in AS-18 ÃRelated Party Disclosuresà and to
the extent such parties have been identified by the company, on the
basis of information available with them. This has been relied upon by
the auditors.
Names of related parties and description of relationship:
1. Holding Company Nil
2. Subsidiaries Company Nil
3. Fellow Subsidiaries Nil
4. Associates Nil
5. Key Management Personnel Dr. Rikhab C. Jain
Mr. Sanjay Jain
Mrs. Jyoti Jain
6. Relatives of Key Management Personnel Nil
15. DEFERRED TAXES
Deferred taxes arise because of difference in treatment between
financial accounting and tax accounting, as ÃTiming differenceÃ. The
tax effect of these timing differences is recorded as Ãdeferred tax
assetsà (generally items that can be used as a tax deduction or credit
in future periods) and Ãdeferred tax liabilitiesà (generally items for
which the Company has received a tax deduction, but have not yet been
recorded in the statement of income).
Recognition of deferred tax assets has been restricted to the extent of
deferred tax available. Based on schedule of reversal of timing
differences giving rise to deferred tax liabilities, the management
believes there is requisite degree of virtual certainty that the
deferred tax assets, to the extend recognised, would be realised
16. ADDITIONAL INFORMATION PURSUANT TO SCHEDULE VI TO THE COMPANIES
ACT, 1956:
(A) Break-up of expenditure on employees who are in receipt of or were
entitled to receive remuneration amounting in aggregate to Rs.24 laks
or more per annum or Rs.200,000/- per month if employed for part of the
year
*As certified by the Management. Since the company installation can
technically be considered as multipurpose plants, their capacity is
variable in line with process improvements and the product mix adopted
from time to time. The figures given in relation to installed
capacities are therefore, approximate and refer to an assumed product
mix. Figures in Bracket *( )* represent previous year.
Mar 31, 2010
CurrentYear PreviousYear
(Rs. in lakhs) (Rs. in lakhs)
1. Contingent Liabilities
not provided for in respect of
a) Guarantees given by Banks NIL NIL
b) Export Bills discounted
with banks under Irrevocable
Letter of Credit 4476.17 1974.15
c) Income Tax liability not
acknowledged and contested 15.86 15.86
2. Contract remaining to be executed on capital account is Rs. 937.45
lakhs (Previous year Rs. 2674 Lakhs) net of advances Rs.786.16 Lakhs
(Previous year Rs. 509 Lakhs).
3. The company had contracted to sale Plant & Machinery of its plant
location at Avinashi via Memorandum of Understanding (MOU) dated
06.12.2006. However the customer defaulted on the delivery terms and
conditions and hence the company had to dispose balance machinery at a
discount.
As per terms of MOU the company has filed a claim against the customer
for the loss suffered amounting Rs.160.69 lakhs and interest amounting
to Rs.45.61 lakhs in the year 2008-09. The management is confident that
a sum of Rs. 96.43 lakhs, shown as recoverable (pending settlement),
will be realised in due course.
4. a) Income Tax Assessments have been completed upto assessment year
2006-07 except for the Assessment year 2003-04 where the department has
raised demand of Rs. 15.86 lakhs which is being contested. Assessment
for the year 2007-08 is in progress, liability if any over and above
the existing provisions will be provided only on completion of the
assessments .The management forsees that existing provisions are
sufficient for the same.
b) Erstwhile T.T. Finance Ltd. (Since amalgamated with the Company) has
paid Income tax demand of Rs. 8.05 lakhs, pertaining to the assessment
year 1992-1993. The company has contested the same and ITAT has quashed
the demand. In appeal effect, the company has found an apparent mistake
of not allowing credit of tax paid and hence filed a rectification
application under section 154, which is pending.
c) In accordance with the companys policy a sum of Rs. 16245507.60
(Previous year Rs. 14908042) including Rs. 1337465.60 (Previous year
Rs. Nil) for the year has been shown as MAT credit entitlement under
Loan & advances.
5. Sales Tax assessments in different states have been completed upto
the assessment year 2006-2007. Liability if any, arising out of
remaining Sales Tax Assessments, which are in progress at various
stages, will be provided only on the final assessment. However,
management foresees no significant liability on this account.
6. In the opinion of the Management, the value on realisation of
current assets. Loan and advances in the ordinary course of business
would not be Less than the amount at which they are stated in the
Balance Sheet and provision for all known liabilities has been made.
7. Consistent with its past policy, the company has on the basis of
technical opinion continued to treat plant and machinery of spinning
units at Gajroula, Avinashi & Rajula as continuous process plant.
8. Trade creditors include outstanding dues of small scale industries
Rs. 22.78 lakhs (Previous year Rs. 12.76 lakhs) .The above information
regarding small scale industrial undertakings has been determined to
the extent such parties have been identified by the company, on the
basis of information available with them. This has been relied upon by
the Auditors.
9. Disclosure in accordance with section 22 of Micro, small and Medium
Enterprises Development Act, 2006
This information as required to be disclosed under the Micro, small and
Medium Enterprises Development Act,2006 has been determined to the
extent such parties have been identified on the basis of information
available with the company.
10. During the year, the company has capitalised the borrowing cost of
Rs. 98.01 lakhs, incurred on acquisition of fixed assets. The
allocation of interest on borrowings, for the purpose of
capitalisation, in respect of funds borrowed and used for the purpose
of obtaining a qualifying asset has been done on the basis of use of
funds as per the best possible estimates.
11. As on date of Balance Sheet the company has gross exposure in the
form of Plain Vanilla Forward Contracts for the purpose of hedging
export sales amounting to US $ 2.02 million.
12. a) Some of the debit and credit balances appearing underthe head
Fixed Deposits, Current Liabilities, Sundry Debtors and Loans &
Advances are subject to confirmation / reconciliation.
b) Previous year figures have been regrouped or rearranged wherever
considered necessary.
13. EMPLOYEE BENEFITS
As per Accounting Standard 15 "Employee Benefit" the disclosure of
Employee Benefit, as defined in Accounting Standard are given below:-
Defined Benefit Plan
The employees Gratuity Fund Scheme, which is defined benefit plan, is
managed by Trust maintained with Life Insurance Corporation of India
(LIC). The present value of obligation is determined, using Projected
Unit Credit Method, which recognized each period of service as giving
rise to additional unit of employee benefit entitlement and measures
each unit separately to build up the final obligation. The obligation
for compensation absences is recognized in same manner as gratuity.
The expected of rate in increase in salary considered in actuarial
valuation is based on consideration of inflation, seniority, promotion,
accretion, and other relevant factors including supply and demand in
the employment market. The above information is certified by actuary.
14. SEGMENT IN FORMATION
The Company operate under single business segment "Textiles". Company
deals in four product i.e. cotton, yarn, fabric and made- ups. There
above information is certified by actuary Company sells cotton in
domestic as well as in overseas market. Yarn, covers bought out yarn
as well as production of basic cotton yarn over a very wide range of
counts, which besides being primarily exported, is also marketed in
Domestic Market. Fabric includes both bought out fabric as well as the
value added activities relating to knitting, dyeing and processing.
Textile Made-ups, made under licence of renowned brand "T.T".
15. DEFERRED TAXES
Deferred taxes arise because of difference in treatment between
financial accounting and tax accounting, as "Timing difference". The
tax effect of these timing differences is recorded as "deferred tax
assets" (generally items that can be used as a tax deduction or credit
in future periods) and "deferred tax liabilities" (generally items for
which the Company has received a tax deduction, but have not yet been
recorded i n the statement of income). The principal components of the
net deferred tax balance are as follows: